7/23/2009 @ 12:00PM

Purpose-Driven Leadership

America’s trust of business is at a low ebb. But this sorry trend presents an opportunity for purpose-driven companies and their leaders.

Why is that?

Start with what we know. Successful businesses engender loyalty, both among customers and employees. The automaker BMW is a great example. Its customers go beyond loyal; they are fans and evangelists for BMW’s products. BMW is a purpose-driven organization. “The Ultimate Driving Machine” is more than a slogan for BMW. It is a timeless goal, a purpose for existence.

You may protest that BMW is a premium product, so of course it engenders loyalty–the loyalty of a snob. But
Southwest Airlines
, a low-frills carrier, also creates wild fans. Southwest’s flight attendants approach their jobs with enthusiasm and humor, and the effect is contagious. Southwest is driven by a purpose: to make flying affordable, on-time and fun.

I would argue that purpose-driven companies have a huge competitive advantage right now. Employees and customers are hungry for purpose. Yes, employees want jobs. Yes, customers want deals. But even in a recession, we want more than that. We want to feel that our lives have a deeper meaning that goes beyond paychecks and discount shopping.

Abraham Maslow had it right. Once our physical needs are met, we long for love, belonging, esteem and finally what Maslow called “self-actualization”–that our lives count.

The psychiatrist and Holocaust survivor Viktor Frankl made the same point with greater poignancy. Upon his release from the concentration camps, Frankl set about writing his masterwork, Man’s Search for Meaning. Camp survivors, Frankl had observed, were those who believed their lives had meaning and purpose amid the starvation and degradation. The nihilists and cynics perished.

I recently spoke to such a company, Hy-Vee, at its Des Moines, Iowa, headquarters. This supermarket and drugstore chain was enjoying a record year in the teeth of a recession and a worrisome new competitor called Walmart. Before my speech, I talked to Hy-Vee’s CEO, Ric Jurgens. Turns out we’re both bicycle nuts, but Jurgens, age 60, is my superior on two wheels. He lives, eats and sponsors (by way of the Hy-Vee Triathlon) the active healthy lifestyle.

Jurgens sees supermarkets as the place where good health is made or broken. One of his brainstorms is to post nutritional scores in the cereal aisle. The Hy-Vee nutritional score is a ratio of nutritional value per calorie and is given to each box of cereal. The idea is to arm shoppers, parents of young children especially, with information that bears directly on body weight, which is the No. 1 predictor of health in affluent countries.

In other words, Hy-Vee’s purpose is to make healthy food choices available at affordable prices. Supermarkets have notoriously low profit margins, and this fact won’t change with
Wal-Mart’s
entry. But Jurgens believes that having the right purpose will create loyal customers and motivated employees, which will give Hy-Vee above-average margins.